Journal Press India^®

Author Details ( * ) denotes Corresponding author

Tax evasion presents a substantial menace to the economic prosperity and advancement of a nation. This article examines the adverse impacts of tax evasion on the efficiency and expansion of the economy, with a particular emphasis on India. In order to effectively address tax evasion, officials should give priority to enforcement measures and foster a culture of tax compliance. Tackling tax evasion is crucial for promoting sustained economic development and prosperity in India and other countries grappling with similar issues. Allowing taxpayers to make offsetting modifications on less provable margins may reduce third-party data relevance. A natural experiment of a developing country like Ecuador provides a clear paradigm and sufficient empirical evidence to explain how and why this might happen. This adjustment results in a $9.60 increase in taxes collected for every $1 discrepancy corrected, highlighting the potential of data-driven enforcement in boosting compliance and tax revenue.

Keywords

Tax evasion; Corporate misreporting; Enforcement constraints; Tax revenue

1. Allam, A., Abou-El-Sood, H., Elmarzouky, M. & Yamen, A. (2024). Financial development and tax evasion: International evidence from OECD and Non-OECD countries. Journal of International Accounting, Auditing and Taxation, 57(c), 1-13.
2. Angell, M. B. (1938). Tax evasion and tax avoidance. Columbia Law Review, 38(1), 80–97. Retrieved from https://doi.org/10.2307/1116551
3. Benon, O.P., Baer, K. & Juan, T. R. (2002). Improving large taxpayers’ compliance: A review of country experience. Washington, DC: International Monetary Fund.
4. Carlos, M., Brockmeyer, A., Kleven, H. J., Spinnewijn, J. & Waseem, M. (2018). Production versus revenue efficiency with limited tax capacity: Theory and evidence from Pakistan. Journal of Political Economy, 123(6), 1311–55.
5. Carrillo, P., Pomeranz, D. & Singhal, M. (2017). Dodging the Taxman: Firm misreporting and limits to tax enforcement. American Economic Journal: Applied Economics, 9(2), 144–64.
6. Centre for Tax Policy and Administration (CTPA) (2011). Forum on tax administration: Tax administration in OECD and selected non-OECD countries: Comparative information series (2010). Paris: Organisation for Economic Cooperation and Development (OECD).
7. Das, P. K. (2018). An insight into black money and tax evasion–Indian context. Journal of International Business Research and Marketing, 3(4), 30-39.
8. Joshua, D. & Levin, D. Z. (2010). When is tax enforcement publicized? Virginia Tax Review 30(1), 1–38.
9. Kapoor, P. (2021 June). Tax evasion under GST and measures to curb it. Retrieved from https://taxguru.in/goods-and-service-tax/tax-evasion-gst-measures-curb.html
10. Khaltar, O. (2023). Tax evasion and governance quality: The moderating role of adopting open government. International Review of Administrative Sciences, 90(1), 276-294.
11. Kumar, R. (2021). Tax evasion in India: A review of recent studies. Journal of Economic Research, 25(2), 135-150.
12. Livemint, (2022 August). Back ITR filing: You can still face fine of ₹5,000 even if income tax return filed on time. Retrieved from https://www.livemint.com/money/personal-finance/itr-filing-you-can-still-face-fine-of-rs-5-000-even-if-income-tax-return-filed-on-timae-11660580721588.html
13. Martinez-Lopez, D. (2013). The underreporting of income by self-employed workers in Spain. SERIEs, 4(4), 353–371.
14. Patel, M. (2017). Tax evasion and its impact on economic growth: A Literature review with special reference to India. Journal of Public Finance and Policy Analysis, 15(1), 75-90.
15. Pomeranz, D. (2013). No taxation without information: Deterrence and self-enforcement in the value added tax. NBER Working Papers 19199, National Bureau of Economic Research, Inc.
16. Pomeranz, D., Marshall, C. & Castellón, P. (2014). Randomized tax enforcement messages: A policy tool for improving audit strategies. Retrieved from https://www.ciat.org/Biblioteca/ Revista/Revista_36/Ingles/2014_Pomeranz_Marshall_Castellon_ing.pdf
17. Richardson, G. (2006). Determinants of tax evasion: A cross-country investigation. Journal of International Accounting, Auditing and Taxation, 15(2), 150–169.
18. Sharma, P. (2013 May). Fighting business corruption in India. World Economic Forum. Retrieved from https://www.weforum.org/agenda/2013/05/fighting-business-corruption-in-india/
19. Yaniv, G. (1988). Withholding and non-withheld tax evasion. Journal of Public Economics, 35(2), 183–204.